By 2010, we will accelerate our global plug-in
hybrid R&D program. As part of this plan, we will
deliver a significant fleet of PHEVs powered by
lithium-ion batteries to a wide variety of global
commercial customers, with many coming to the U.S.

To make that happen, we have already started the
planning phase to expand our Panasonic
joint-venture battery factory. The expansion will add an assembly line
to build lithium batteries for automotive applications.

CALCARS' RESPONSE

"We've always thought Toyota could build great
plug-in hybrids. Now we get to thank the company
for listening to the fleet buyers, drivers,
corporate leaders, public officials, electoral
candidates, policy makers, advocacy groups and
consumers asking it to build them sooner.
Toyota's long-awaited announcement that it will
deploy demonstration fleets brings the plug-in
campaign much closer to our goal -- "successful
PHEV commercialization ASAP" -- which will happen
as car companies race to mass-produce plug-in hybrids.

We hope Toyota will pick some of the companies,
government agencies and others that signed up
through Plug-In Partners' campaign to be among
the lucky testers of the first fleet cars.
CalCars and our partners in the PHEV campaign
will continue to make the case for accelerating
every aspect of the development cycle. And we'll
work to bring in public and private incentives
and regulatory measures to help ensure that the
interval between the appearance of the first cars
and the mass-produced PHEVs the public can buy is as short as possible."
-- Felix Kramer, Founder, The California Cars Initiative (CalCars.org)

Lithium batteries, two new hybrid vehicles and a
clean-diesel engine also on the way

Have you been wondering what Toyota's next steps
might be as it moves forward toward cleaner,more
efficient cars and trucks? Been wondering, maybe,
about where we are on plug-in hybrids and
lithium-ion batteries, among other things?

You no longer have to wonder. Reiterating
Toyota's intention to exceed new Corporate
Average Fuel Economy (CAFE) standards rather than
merely meet them, Katsuake Watanabe, president of
Toyota Motor Corp., spelled out at least part of
the future Sunday in a stunning series of
announcements at the North American International
Automobile Show (NAIAS) in Detroit.

As a part of its commitment to the concept of
sustainable mobility, Watanabe said that Toyota
will build and deliver what he called "a
significant fleet" of Plug-in Hybrid Electric
Vehicles (PHEVs) that rely on lithium-ion
batteries to a variety of global fleet customers.

A large part of that PHEV fleet will be sent to
fleet customers in the U.S., Watanabe said.
Toyota will deliver its PHEVs as part of the
acceleration of its global plug-in hybrid
research and development program, scheduled to begin late next year.

Indeed, early iterations of the PHEVs were
planned for use transporting Toyota executives to
the show this week, Detroit's notorious January
weather permitting, and also for limited use by
select members of the media - again, weather permitting.

And that wasn't all. As part of its plug-in
development plan, Watanabe said, Toyota has begun
the planning phase of an expansion of a battery
factory it operates as a joint venture with electronics giant Panasonic.

"The expansion will add an assembly line to build
our first-generation lithium battery for
automotive applications," Watanabe said,
signaling that while others continue to
bench-test lithium-ion battery prototypes, Toyota
is ready to go into lithium-ion battery production.

But that wasn't the end of the announcements from
Watanabe. He also promised two new hybrid vehicles.

"Next year, here in Detroit, we will expand our
conventional hybrid line-up by staging world
premieres for two all-new dedicated hybrids -
one for Toyota, and one for Lexus," he said.

Watanabe noted that Toyota's goal is to sell, by
2010, a million hybrid vehicles per year. These
two introductions will help the company meet that goal, he said.

But there's more to Toyota's vision of
sustainable mobility than hybrids. That vision
includes other forms of motive power, including diesel and ethanol.

With that in mind, Watanabe confirmed a
clean-diesel V8 engine will be offered in the
Tundra pickup and Sequoia SUV in what he described as the near future.

Additionally, he said, Toyota's biotechnologists
are developing cleaner and more efficient methods
of producing ethanol that can be used as fuel
from wood-waste materials, rather than from food crops.

Toyota is pursuing its vision of sustainable
mobility, Watanabe said, because it is interested
in doing more than merely meeting the revised
CAFE standards passed by the Congress, and signed
into law by President Bush, in December.

He said, "Last month, the U.S. Congress agreed on
an energy bill calling for a 35 mpg CAFE by 2020.
Toyota strongly supports this long-overdue
legislation. However, we will not wait until the
deadline to comply. I have issued a challenge to
our engineers to meet the 35 mpg standard well in
advance of 2020. I believe that it can be done,
that it should be done, and that Toyota is capable of doing it."

DETROIT  The Toyota Motor Corporation, which
leads the worlds automakers in sales of
hybrid-electric vehicles, announced Sunday night
that it would build its first plug-in hybrid by 2010.

The move puts Toyota in direct competition with
General Motors, which has announced plans to sell
its own plug-in hybrid vehicle, the Chevrolet Volt, sometime around 2010.

Katsuaki Watanabe, the president of Toyota,
announced the companys plans at the Detroit auto
show as part of a series of environmental steps.

Mr. Watanabe said Toyota, best known for its
Prius hybrid car, would develop a fleet of
plug-in hybrids that run on lithium-ion
batteries, instead of the nickel-metal hydride
batteries that power the Prius and other Toyota models.

Plug-in hybrids differ from the current hybrid
vehicles in that they can be recharged
externally, from an ordinary power outlet. In a
conventional hybrid the battery is recharged from
power generated by its wheels.

Mr. Watanabe said the lithium-ion fleet would be
made available first to Toyotas commercial
customers around the world, like government
agencies and corporations, including some in the
United States. He did not say when they would be available to consumers.

<snip>
Some environmental groups have pushed for plug-in
hybrids, called PHEVs, or plug-in hybrid electric
vehicles, as a way to save on gasoline, thus curbing emissions.

But some experts say plug-ins may not be the
ultimate answer to cutting pollution, if the
electricity used to charge them comes from coal-fired power plants.

That is also a concern to Toyota, which has asked
researchers to determine not only whether
consumers would be willing to pay for a plug-in,
but also the effect it would have on the
environment, James Lentz, the president of Toyota
Motor Sales, said in an interview Sunday.

Nonetheless, G.M., Toyota and Ford Motor, the
worlds three biggest car companies, all are
developing plug-in hybrid vehicles. Along with
the Volt, G.M. has said it plans to produce a
plug-in version of its Saturn Vue hybrid. Ford
has not yet given details of its plug-in hybrid,
which it first discussed in 2006.

Indeed, Toyota executives initially questioned
the practicality of plug-in hybrids, saying
consumers preferred the convenience of hybrids
that did not have to be recharged. Toyota has
sold more than one million hybrids worldwide,
including more than 800,000 Prius cars.

But the automaker announced last July that it was
testing plug-in hybrids on public roads in Japan.
It also is testing them in France, Toyota
officials said Sunday, and it has given prototype
versions of plug-in hybrid vehicles to university researchers in California.

<snip>
Despite its decision to step up its plug-in
hybrid development, Toyota is not sure how much
more consumers will want to pay for it, Mr. Lentz
said. The Prius starts at $21,100. Some
after-market companies are charging nearly that
much to convert Prius models into plug-ins, he said.

Given that, it is more likely that Toyota would
offer plug-in technology as an option on the
Prius, at least in the short term, rather than
switch all of its hybrids to plug-in models.

Ultimately, Toyota must determine do people want
to plug in their car? Ms. Chitwood said.

BLOOMBERG:
Initial vehicles will be leased rather than sold,
which led to controversy in the past (RAV4 EV, GM
EV1) but has the benefit of removing the issue of
battery lifetime from consideration by the fleet customer.

Jan. 14 (Bloomberg) -- Toyota Motor Corp. plans
to lease hybrid cars with lithium-ion batteries
that can recharge at home outlets by 2010,
matching General Motors Corp.'s target for
introducing the fuel-efficient vehicles.

The company will provide a ``significant'' number
of plug- in hybrids ``to global fleet customers,
with a large percentage coming to the U.S.,''
President Katsuaki Watanabe said at the Detroit
auto show late yesterday, without elaborating.
The cars will help Toyota meet new U.S. fuel-economy rules early, he said.

``We will put the full force of our resources''
into efforts to develop vehicles that increase
fuel economy and reduce carbon emissions, Watanabe said.

Toyota, initially hesitant to embrace plug-ins,
is now racing GM and other automakers to develop
the technology. The Toyota City, Japan-based
company leads in sales of current hybrids, which
can't recharge at outlets. GM has said it may
start selling its Volt plug-in hybrid car with
lithium-ion batteries as early as 2010.

GM is ``right in that race,'' Chief Executive
Officer Rick Wagoner, 54, told Bloomberg
Television in a Jan. 8 interview in Las Vegas,
where the Detroit-based automaker showed a
futuristic Cadillac sport-utility vehicle powered
by hydrogen and lithium- ion batteries. GM and
Toyota also are competing for the title of
world's largest automaker, a ranking the U.S.
automaker has held for 76 years and may have lost
to the Japanese company in 2007.

Not Ready

Toyota officials last year had said that lithium
batteries for plug-ins weren't ready for consumer
use and couldn't gauge market demand.

``The advanced lithium-ion batteries that the
Volt would use, batteries suitable for the
long-term rigors of everyday automotive use,
don't exist,'' Irv Miller, Toyota's U.S. vice
president for corporate communications, wrote on
a company Web site in September.

<snip>
Lithium-Ion Challenge

Lithium-ion batteries have become standard in
mobile phones and laptop computers. Packs needed
for Toyota's plug-in hybrids will come from an
assembly line the automaker will open at its
Panasonic EV joint venture in Japan, run with
Matsushita Electric Industrial Co.

Panasonic EV is the world's largest supplier of
nickel- metal battery packs for Toyota's Prius,
the best-selling gasoline-electric vehicle, and other hybrids.

Automakers have said lithium-ion batteries that
hold as much as twice the power of nickel-metal
versions, are needed for autos that run almost
entirely on electricity, consume little or no
gasoline and can be recharged at household outlets.

Lithium-ion batteries aren't currently available
in large quantities, cost more and are harder to
produce than nickel- metal batteries, and can burn if they overheat.

``You combine Toyota's experience with nickel
metal, the lithium expertise for Panasonic and
lithium research from Toyota, definitely they are
the strongest player,'' said Anderman, whose
research is bought by all major carmakers and who
consults with the U.S. and Japanese governments on battery developments.

Johnson Controls Inc. said today at the Detroit
show that it may have lithium-ion batteries for
plug-in hybrids available by 2010 and that that
it's trying to produce the power sources for
vehicles such as GM's Volt. Johnson Controls,
based in Milwaukee, is the world's largest maker of auto batteries.